01—Abstract
Summary
Summary of the 8-K filed April 26, 2024. Cited figures are marked; the original filing is the authoritative source.
On April 26, 2024, Pizza Hut Holdings, LLC, KFC Holding Co. and Taco Bell of America, LLC, each a wholly owned subsidiary of YUM!
Brands, Inc. ("YUM" or the "Company"), entered into Refinancing Amendment No. 7 to the Credit Agreement dated as of June 16, 2016, with JPMorgan Chase Bank, N.A. as Collateral Agent, Swing Line Lender, L/C Issuer and Administrative Agent. The amendment refinanced an existing approximately $713 milliona term loan A facility and a $1.25 billion revolving facility with a new $500 million term loan A (the "Term A Loan") and a $1.5 billion revolving credit facility (the "Revolving Facility"). The new facilities mature on the earliest of April 26, 2029, 91 days before the maturity of the Borrowers' existing term loan B if more than $250 million of it remains outstanding, and 91 days before the maturity of the existing senior notes if more than $250 million of those notes remains outstanding.
Interest rates are unchanged in structure: Adjusted Term SOFR or base rate loans plus a leverage-based spread, initially 0.75%b for Adjusted Term SOFR loans and 0.00% for base rate loans, ranging from 0.75% to 1.50% and 0.00% to 0.50% respectively. The Term A Loan amortizes at 2.5% per annum in the second and third years and 5.0% per annum in the fourth and fifth years after closing. The amendment removes the excess cash flow mandatory prepayment requirement and the most-favored-nation requirement for the Term A Loan, and increases the swing line sublimit.
All other material provisions of the Credit Agreement remain unchanged. The full terms are in Exhibit 10.1, Refinancing Amendment No. 7.
02—Key points
Key Highlights
- Borrowers Pizza Hut Holdings, LLC, KFC Holding Co. and Taco Bell of America, LLC, each wholly owned by YUM! Brands, Inc., entered into Refinancing Amendment No. 7 to the Credit Agreement on April 26, 2024.
- Existing approximately $713 million term loan A and $1.25 billion revolving facility were refinanced with a $500 million Term A Loan and a $1.5 billion Revolving Facility.
- New facilities mature on the earliest of April 26, 2029, or 91 days before the maturity of the existing term loan B or senior notes if more than $250 million of either remains outstanding.
- Interest rates remain based on Adjusted Term SOFR or base rate plus a leverage-based spread, initially 0.75% for Adjusted Term SOFR loans and 0.00% for base rate loans.
- Term A Loan amortizes at 2.5% per annum in years two and three and 5.0% per annum in years four and five after closing.
- Excess cash flow mandatory prepayment and most-favored-nation requirements were removed for the Term A Loan, and the swing line sublimit was increased.
- The filing also includes the Item 2.03 direct financial obligation disclosure, incorporated by reference from Item 1.01.
03—Questions
Frequently Asked Questions
What changed in YUM's credit facilities?
The existing approximately $713 million term loan A and $1.25 billion revolving facility were refinanced with a new $500 million Term A Loan and a $1.5 billion Revolving Facility under Refinancing Amendment No. 7.
When do the new facilities mature?
They mature on the earliest of April 26, 2029, 91 days before the maturity of the Borrowers' existing term loan B if more than $250 million remains outstanding, or 91 days before the maturity of the existing senior notes if more than $250 million remains outstanding.
How is pricing determined on the new borrowings?
Interest is based on Adjusted Term SOFR or the base rate plus a spread tied to the total leverage ratio. The initial spread is 0.75% for Adjusted Term SOFR loans and 0.00% for base rate loans, ranging from 0.75% to 1.50% and 0.00% to 0.50% respectively.
How will the Term A Loan be repaid?
The Term A Loan amortizes at 2.5% per annum during the second and third years after closing and at 5.0% per annum during the fourth and fifth years.
Which provisions changed besides the amounts and maturity?
The amendment removes the excess cash flow mandatory prepayment requirement and the most-favored-nation requirement for the Term A Loan, and increases the swing line sublimit. All other material provisions of the Credit Agreement remain unchanged.
04—Continue